Pensions will increase by an average of eight percent next year, it was announced at the summer economic forecast presentation on Monday. This increase will see the average pension increase to over €500.
Pensions increase annually in April as a result of indexing, with the change coming into effect on the first day of the month.
In the second quarter of this year (the months of April, May and June) the average old-age pension was nearly €485. Next year, a person receiving an average old-age pension will receive about €39 more, or about €524 a month.
The basis for calculating the pension index is 80 percent of the change in the receipt of the pension insurance part of the social tax of the previous year and 20 per cent of the change of the consumer price index of the previous year. These changes result in an index that is then approved by the government. The index multiplies the basis for calculating state pensions as well as the national pension rate.
The basic pension is increased by more than the annual rate. Its purpose is to increase the share of pension that is paid equally to all pensioners, regardless of their contribution, and which helps those who receive a small to cope better. If the consumer price does not rise and the share of social tax falls, there is no indexation because pensions cannot be reduced.
Pensions also increased by an average of 8.4 percent this spring.
Editor: Helen Wright